International Journal of Sports Marketing and Sponsorship

Investigating the moderating role of fit on sports sponsorship and brand equity
Jrg Henseler Bradley Wilson Oliver Gtz Caspar Hautvast
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To cite this document:
Jrg Henseler Bradley Wilson Oliver Gtz Caspar Hautvast , (2007),"Investigating the moderating role of fit on sports
sponsorship and brand equity", International Journal of Sports Marketing and Sponsorship, Vol. 8 Iss 4 pp. 34 - 42
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 Investigating the moderating role of fit on sports
sponsorship and brand equity

Keywords
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sponsorship
sport sponsorship index
sponsorship fit
brand equity
partial least squares

Abstract

This paper outlines how managers involved in

Jrg Henseler sponsorship decisions view the impacts of different
Nijmegen School of Management, Radboud University

RESEARCH PAPER
Nijmegen, The Netherlands levels of sponsorship on brand equity. The moderating
Tel: +31 24 361 1854 role of fit between sponsor and sponsee is also
Email: j.henseler@fm.ru.nl
investigated. The study participants were managers
Bradley Wilson involved in sponsoring football clubs in the
School of Applied Communication, RMIT University, Melbourne, Australia Netherlands. Sports sponsorship was conceptualised
Oliver Gtz as a second-order formative index, the sport
Institute of Marketing, University of Munster, Germany sponsorship index (SSI). Results indicate that the
Caspar Hautvast relationship between sport sponsorship and brand
TNS Nipo, Amsterdam, The Netherlands equity is significant, with greater variability being
explained when fit and the interaction term is
Peer reviewed introduced into the model.

Executive summary

This paper tests a structural model of how managers
view the impacts of different levels of sponsorship on
brand equity. The results not only explore direct effects
but also investigate the moderating role of perceived fit
between sponsor and sponsee.
Managers involved in sponsoring football clubs in
the Netherlands were the focus for this study. This
offers a new perspective for looking at these
relationships, as most work to date has concentrated
on the consumer perspective. Football sponsorship
was chosen as this is the most popular sport and
there are many different sponsorship types and
arrangements.
We constructed a second order formative index
called the sport sponsorship index (SSI) which
comprised the following components: exposure,

l JULY 2007 l International Journal of Sports Marketing & Sponsorship 34

 The role of fit on sponsorship and brand equity
competition, coverage and advantages. The model was
estimated with partial least squares, which has
numerous well known advantages when using
formative measures. The results indicate that different
levels of sponsorship, as measured through the SSI,
positively influence incremental brand equity.
When the moderator and its respective interaction
terms were added to the model we found that
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perceived fit was a significant moderator of the direct
effects relationship. Surprisingly, the moderating effect
turned out to be negative when the interaction term
was added.
Sporting managers see that once the level of
sponsorship is high enough, fit matters less. That is, if
fit is low, this low fit can be substituted by making a
bigger investment in the sponsorship. This is
interesting as it contrasts with established studies from
the consumer perspective on the dynamics of fit when
RESEARCH PAPER
it is a moderator. The effect size was considered small
although quite important given the unexpected
interaction finding.
These finding are notable as they contribute to the
research quantum illustrating the effects of sponsorship
on brand equity. The results also strongly suggest that
future research should incorporate fit as a moderator
when investigating broader structural models.
Introduction
Despite the growing economic importance of
sponsorship, it has not been a popular topic for
academic research (Cornwell & Maignan, 1998).
Sponsorship was seen as an extension of advertising
to a brand perspective (Cliffe & Motion, 2005) yet
sponsorships importance as a marketing
communications tool has increased significantly in
comparison to traditional advertising (Erdogan &
Kitchen, 1998; Harvey, 2001).
There are growing pressures for sporting managers
and researchers to track pertinent marketing
performance metrics. The Marketing Science Institute
(2004) has highlighted the need for greater use and
35 International Journal of Sports Marketing & Sponsorship
development of marketing metrics. Both sponsee and
sponsor are particularly interested in how the level of
sponsorship affects performance outcomes and what
factors may moderate this relationship. The goal of
this paper is to investigate a structural model
explaining relations between sports sponsorship and
customer-based brand equity. This main effects model
is then scrutinised further by investigating the direct as
well as the moderating role of fit between sponsee and
sponsor. The paper first explores pertinent literature
and develops hypotheses; then our methodology is
outlined; finally, the results are presented, with
recommendations for further research.
Literature review and
hypothesis development
Cornwell (1995) defines sponsorship-linked marketing
as the orchestration and implementation of marketing
activities for the purpose of building and
communicating an association to a sponsorship.
Cornwell & Maignan (1998) state that sponsorship
involves two main activities: (1) an exchange between
a sponsor and a sponsee whereby the latter receives a
fee and the former obtains the right to associate itself
with the activity sponsored, and (2) the marketing of
the association by the sponsor. Both activities are
necessary if the sponsorship is to be a meaningful
investment. A sponsoring organisation can thus use
and exploit the association with the sponsored object.
This can be seen as the main objective for a company
in sponsoring a sporting entity. However, there are
other motives: sponsorship objectives are varied and
may relate to a range of brand and strategic objectives
(Farrelly & Quester, 2005).
Javalgi et al (1994) found that sponsorship can
enhance the sponsors corporate image, but this is not
automatic. Research by Bennett (1999, p. 309)
shows that sponsorship is a powerful device for
communicating with spectators at sporting events, and
by implication therefore with team supporters who
watch matches at home on television. Sponsorship
l JULY 2007 l
 The role of fit on sponsorship and brand equity
appears to be effective not only for enhancing brand
awareness and recall, but also for creating among
supporters perceptions of widespread use of
sponsoring firms' products. Madrigal (2000) found
that through sports sponsorship a company can link
itself, or its product, to the strong feelings a consumer
has towards the sponsored team. Companies that are
able to tap into a consumers psychological
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connectedness with a sports team successfully can
become more meaningful than a mere product.
Amis et al (1999) argue that a sponsorship
agreement should be considered as a resource which,
if carefully managed, can be developed into a
distinctive competence capable of producing a
sustainable competitive advantage for a firm.
Companies get involved in sponsorship to increase
brand awareness and to establish, strengthen or
change brand image (Gwinner & Eaton, 1999). Brand
awareness and brand image are key aspects of brand
equity Keller (1993) incorporates them under brand
knowledge within his consumer brand knowledge
model. Many of the marketing scholars referenced
below believe that strong brands help create high
brand equity. Aaker (1996, p.78) defines brand equity
as a set of assets and liabilities linked to a brands
name and symbols that adds to or subtracts from the
value provided by a product or service to a firm and/or
that firms customers. The major asset categories are:
brand name awareness, brand loyalty, perceived
quality, and brand associations.
Brand awareness refers to the strength of a brands
presence in the consumers mind. It is measured in
different ways (brand recognition, brand recall, top of
mind and dominant brand).
Brand loyalty is a key consideration in placing a value
on a brand, because a highly loyal customer base can
be expected to generate a very predictable sales and
profit stream.
Perceived quality is a brand association that is
elevated to the status of a brand asset for several
l JULY 2007 l International Journal of Sports Marketing & Sponsorship
reasons. It has previously been shown that it drives
financial performance and how a brand is perceived.
Brand associations that consumers make with a brand
are integral to its strength. These associations might
include product attributes, a celebrity spokesperson or
a particular symbol (Aaker, 1996).
Enhancing brand equity results in the ability to
command larger margins from consumers, elicit
increased consumer information search and improve
marketing communication and effectiveness (Keller,
1993). While there is growing evidence of the possible
impact of sponsoring on brand equity (Bennett, 1999;
Javalgi et al, 1994), there is a need for further
research to substantiate this assertion empirically. A
study performed by Cornwell et al (2001, p.48) states
that as perceived by managers, sponsorship under
RESEARCH PAPER
active management can contribute to the difficult task
of differentiating a brand from its competitors and
adding financial value to the brand. Other researchers
have found that although sponsorship is a potentially
powerful tool (Farrelly et al, 1997), it is often used
without any clear objective (Otker, 1988).
As stated in the review of the sponsorship literature,
sponsorship is a very efficient means to enhance
brand awareness and brand image (Gardner &
Shuman, 1988; Keller, 2003). It is likely, therefore,
that a positive relationship exists between sponsorship
and both brand awareness and brand associations.
This results in the following hypothesis:
H1: The level of sport sponsorship as perceived by
managers has a positive effect on the change in
brand equity as perceived by managers.
This brand equity construct is particularly focused on
change in brand equity as perceived by managers of the
sponsoring company as a result of sports sponsorship.
Managers completed the questionnaire in this instance.
The focus is on the brand of the sponsor. The attributes
of interest are: brand name awareness, brand
associations, brand loyalty and perceived quality.
36
 The role of fit on sponsorship and brand equity
In general terms, a moderator is a qualitative (e.g.
sex, race, class) or quantitative (e.g. level of reward)
variable that affects the direction and/or strength of the
relation between an independent or predictor variable
and a dependent or criterion variable (Baron & Kenny,
1986, p.114). It seems likely that the strength of the
relationship between the level of sports sponsorship
and the perceived change in brand equity will be
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moderated by other variables. For example, Johar &
Pham (1999) investigate two heuristics for
identification of event sponsors.
Although the objective of a sponsorship agreement
is to promote an association between the sponsor and
the event, sponsors are often misidentified. They state
that brand-event relatedness and market prominence
play a role in the identification of the sponsor. These
factors can be seen as moderating effects of the
influence of sports sponsorship on brand equity,
RESEARCH PAPER
because they determine whether the sponsors are
correctly identified.
It is probable that in sponsor identification,
consumers rely on the semantic overlap between
features of the event and those of potential sponsors.
The higher the degree of fit, the greater the likelihood
that the event will be attributed to a particular sponsor
(Johar & Pham, 1999). According to McDonald
(1991), a synergy is sought between the event and
company values, if one can directly link the event to a
product, so much the better. Rodgers (2003) states
that a sponsor that is relevant to the cause will lead to
more positive consumer evaluations of the sponsor.
Both studies underline the importance of a good fit
between the sponsor and the sponsored object in a
successful identification by the consumer. Successful
identification will impact a change in brand equity
attributed to the sponsorship.
Gwinner & Eaton (1999) found evidence that the
image of a sporting event will transfer to a sponsoring
brands image when the two are linked through a
sponsorship. The sponsors brands can be enhanced
or damaged (Wilson et al, 2004; Wilson et al, 2005)
by association through image transfer (McCracken,
1988). This image transfer will be stronger in sponsor
37 International Journal of Sports Marketing & Sponsorship
relationships where there is functional or image-based
similarity rather than where there is no similarity.
Research performed by Pracejus & Olsen (2004)
confirmed that fit between brand and cause will lead
to a higher effectiveness of an advertising campaign.
Overall, congruence between the sponsor and the
cause will have a more positive impact than
incongruence (Rifon et al, 2004), and it is positively
related to attitude toward the sponsor (Roy &
Cornwell, 2003). Based on all this research, it is
therefore assumed that the fit between the sponsor
and the sponsored object has a positive impact on the
brand equity of the sponsor. Furthermore, in this
research, the fit of the sponsee with the sponsor, as
perceived by managers, will be tested as a moderating
variable. In this case the object is the sponsee, and
the attribute of interest is the fit with the sponsor. This
leads to the following hypotheses:
H2: The fit between sponsee and sponsor has a
positive effect on the change in brand equity as
perceived by managers.
H3: The fit between sponsee and sponsor has a
positive effect on the relationship between level of
sport sponsorship as perceived by managers and
change in brand equity as perceived by managers.
Methodology
The data for this research was collected through a
survey, by means of an online questionnaire. To find
suitable survey candidates the websites of all
professional football clubs and top amateur clubs in the
Netherlands were audited to list the companies that are
involved with sponsorship activities. Most of the
websites contained useful sponsor information. All this
information was put into a database, which helped
build the sample frame. Lower league clubs were
ignored. By concentrating on higher leagues, more
professional sponsorship managers were interviewed.
Finally, this investigation led to a database of 500
l JULY 2007 l
 The role of fit on sponsorship and brand equity

sponsors. In summer 2005, the 500 companies of the
database were approached by email with a request for
cooperation. In total, 86 managers involved in sports
sponsorship decisions were interviewed.
The brand equity perceptions measured are each
managers evaluation of the incremental increase of
brand equity to the customer (football fan) that can be
attributed to the sponsorship. In a reaction to Aakers
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are applied as measurement models. Collinearity
between items was investigated as high levels would
affect the stability of item coefficients. We prevented
multicollinearity by using only the first component of a
PLS regression. The very nature of formative
measurement renders irrelevant conventional
assessments of convergent validity and individual item
reliability (Hulland, 1999, p.201). Bagozzi (1994, p.

(1996) brand equity categories, we adapted Yoo &
Donthus (2001; see also Washburn & Plank, 2002)
items measuring brand equity and put them together
in a hierarchical component model of (incremental)
brand equity (hierarchical models: see Wold, 1982).
The measures were all reflective in nature.
We conceptualised sports sponsorship as a second-
order formative index following the guidelines for
constructing formative indices as proposed by
Diamantopoulos & Winklhofer (2001). A sport
333) states that the best we can do... is to examine
how well the index relates to measures of other
variables. Therefore, we assessed the nomological
validity by means of the association between the
formative exogenous variable and a reflective
endogenous variable within the model
(Diamantopoulos & Winklhofer, 2001).
Due to the use of formative constructs latent variable
scores were estimated using partial least squares path
modelling (PLS). This was implemented in the

RESEARCH PAPER
sponsorship index (SSI) was constructed from these software SmartPLS Version 2.0 M2 (Hansmann &
measures. The SSI consists of four components: Ringle, 2004).

1 Level of brand exposure

2 Amount of coverage (TV and spectators in the
stadium) that a club has
3 Club quality (operationalised by the major
competition in which the club plays)
4 Tie-in advertising opportunities the sponsor
receives (e.g. contact to fans)
Each component was itself a formative index
constructed out of several indicators. As formative
latent variables are defined by their items, regressions
Results
Before the hypotheses could be investigated each
construct was assessed for validity and reliability. The
reflective measures (representing the moderator and
brand equity measures Figure 1) are deemed
satisfactory by conventional standards. Table 1 reports
Cronbachs alpha (), the composite reliability (p) and
average variance extracted (AVE). All common
thresholds are met.

TABLE 1 Reflective measurement model constructs

CONSTRUCT NO. INDICATORS CRON. ALPHA () COMP REL () AVE

FIT 3 0.8791 0.9225 0.7988
BRAND EQUITY 10 0.9529 0.9611 0.7121
BRAND AWARENESS 3 0.9147 0.9435 0.8478
BRAND ASSOCIATIONS 3 0.9104 0.9496 0.8626
BRAND LOYALTY 2 0.9339 0.9680 0.9381
PERCEIVED BRAND QUALITY 2 0.9290 0.9664 0.9351

l JULY 2007 l International Journal of Sports Marketing & Sponsorship 38

 The role of fit on sponsorship and brand equity

TABLE 2 Components of the sports sponsorship index (SSI)

COMPONENT NO. INDICATORS WEIGHT STD ERR t-VALUE

EXPOSURE 7 0.2789 0.1082 2.5784
COVERAGE 9 0.1959 0.1353 1.4474
COMPETITIONS 8 0.1809 0.1871 0.9665
ADVANTAGES 7 0.1985 0.0944 2.1017
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TABLE 3 Structural model results

MODEL 1 MODEL 2 MODEL 3

(INDEX CALIBRATION) (MAIN EFFECTS) (INTERACTION MODEL)
SPORT SPONSORSHIP 0.5138 *** 0.2063 * 0.1815t *
FIT 0.5418 *** 0.5048 ***
INTERACTION TERM -0.1471 *
R2 0.2640 0.4639 0.4824
R2 ADJUSTED 0.2522 0.4456 0.4578
BOOTSTRAPPING RESULTS (N=200) *** <0.001 ** <0.01 *<0.05
RESEARCH PAPER

The weights of the SSI components, as well as the
weights of their indicators, were obtained by PLS
estimation in which the SSI components were
regressed against the brand equity construct. The
components weights and their bootstrap outcomes are
shown in Table 2. The SSI was then fixed as a linear
combination of its components, similar to the
approach taken by Reinartz et al (2004). Although
two components have poor t-values, they were
included in the structural path analysis. To leave these
components out would have affected the conceptual
domain for the formative index (Bollen & Ting, 2000).
Being a formative index it is a necessary condition that
the components tap the entire domain of the global
construct (Bollen & Lennox, 1993). Therefore, we left
all components within the model.
We then estimated three structural models. In the
first model we determined the influence of the SSI
components on incremental brand equity. We found a
strong effect explaining more than a quarter of the
incremental brand equitys variance. This provides
further evidence for the SSIs external validity
(Rindskopf, 1984). In the second model we added fit.
The direct effect of fit was significantly positive and
strong. However, the SSIs impact on the incremental
brand equity decreased. In the third model an
interaction term was included. This moderating effect
was revealed to be significantly negative. The results
of all three models are presented in Table 3. To
determine the merit of the interaction term being
added into the model the effect size was calculated.
This is assessed by reviewing R2 of the main effects
and interactions model using the (Cohen, 1988) effect
size formula (Eq.1):
f 2 = [0.4578 0.4456]/[1- 0.4456] = 0.0220
An effect size (f 2) of 0.02, 0.15 and 0.35 has been
suggested as small, moderate and large respectively
(Cohen, 1998). It is important to understand that a
small f 2 does not necessarily imply an unimportant
effect. If there is a likelihood of occurrence for the

39 International Journal of Sports Marketing & Sponsorship l JULY 2007 l

 The role of fit on sponsorship and brand equity
FIGURE 1 Structural model (Model 3: Interaction Model)
EXPOSURE
COMPETITION
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SPORT SPONSORSHIP
0.1815*
COVERAGE
ADVANTAGES
extreme moderating conditions and the resulting beta
changes are meaningful, then it is important to take
these situations into account (Limayem et al, 2001,
p.281). In this study the effect size was deemed to be
small (0.0220).
Figure 1 illustrates the structural model results for
Model 3 (Interaction Model).
Conclusion
First, our study replicates the findings of Cornwell et al
(2001). Like them, we establish that sports
sponsorship contributes significantly to the formation
of brand equity as perceived by managers. More than
a quarter of the variance in the brand equity change
due to sponsoring can be explained by the level of
sports sponsorship. Fit between the sponsor and the
sponsee has an even stronger impact, as shown in
Model 2. Therefore, both the level of sponsorship and
the fit between sponsor and sponsee lead to an
increase in brand equity as perceived by managers.
This also holds true when the moderating effect of fit
on the relationship between the level of sports
sponsorship is tested.
l JULY 2007 l International Journal of Sports Marketing & Sponsorship
BRAND
FIT ASSOCIATIONS
(INCREMENTAL)
0.5048***
BRAND
-0.1471* AWARENESS
(INCREMENTAL)
BRAND EQUITY
(INCR.)
BRAND
LOYALTY
(INCREMENTAL)
PERCEIVED
QUALITY
(INCREMENTAL)
RESEARCH PAPER
Surprisingly, the moderating effect turned out to be
negative. This is contrary to the findings of Pracejus &
Olsen (2004), Johar & Pham (1999) and Rodgers
(2003), who all used customers as research objects.
Also, drawing from the literature on brand alliances,
we would have suggested that fit had a positive
moderating effect on the relationship between the level
of sports sponsorship and brand equity. Our findings
strongly indicate that there is a bias in managers
evaluations of sport sponsorship outcomes. While
investigations on consumer perceptions underline that
fit fosters the relationship between sports sponsorship
and brand equity, managers seem to believe the
opposite. From their perspective, if the level of
sponsorship is high enough, fit matters less.
Conversely, if fit is low, it can be substituted by
making a bigger investment in the sponsorship.
Our findings are of importance both to managers
involved in sponsorship decisions and to sporting club
administrators. First, our results can help managers
assessing new and existing sponsorship arrangements
to avoid decision biases. Second, sporting club
administrators now have further insights into how
sponsorship managers perceive the clubs contribution
to the formation of sponsor brand equity. The results
40
 The role of fit on sponsorship and brand equity
provide knowledge about the role of fit as well as the
composition of the level of the sponsorship. Such
information may assist significantly when selecting
and negotiating sponsorships.
No research is without limitations. As our research
concentrates on sponsorships with football clubs, further
research is needed to replicate our findings in other
sponsorship domains (e.g. event, charity, the arts). We
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suggest that other dependent measures be included in
the structural model as well as brand equity. Further
research could include constructs like brand personality,
sponsorship relationship stability or corporate reputation.
We believe that such research would improve the
effectiveness of sponsorship arrangements, allowing
maximum benefits to be transferred to each companys
brand. This would provide both parties with more useful
information to maximise the benefits derived from the
sponsorship relationship.
RESEARCH PAPER
2007 International Marketing Reports
Biographies
Jrg Henseler is Assistant Professor of Marketing at
the Nijmegen School of Management, Radboud
University, Nijmegen, The Netherlands. His research
interests encompass brand management, relationship
management and Partial Least Squares path
modelling.
Bradley Wilson is a postgraduate lecturer in
advertising at RMIT University in Melbourne. His
research focuses on brand personality and tracking
metrics, sponsorship, transgressions, permission
marketing and multivariate statistical methods.
Oliver Gtz is a research assistant at the Institute of
Marketing at the University of Muenster and doctoral
candidate at WHU Otto Beisheim School of
Management in Germany. His main research interests
include customer relationship management, brand
management and structural equation modelling.
41 International Journal of Sports Marketing & Sponsorship
Caspar Hautvast is project manager for market
research firm TNS Nipo in Amsterdam. He specialises
in sports marketing and sponsorship research.
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